South Korea Jan Current Account -$0.77 Billion

South Korea saw a current account deficit of $0.77 billion in January, the Bank of Korea said on Tuesday, falling into the red for the first time in 23 months.

That still beat forecasts for a shortfall of $2.5 billion after showing a surplus of $3.959 billion in December, $5.046 billion in November and $4.23 billion in October.

The goods account shifted to a deficit of $1.42 billion as exports declined substantially, the bank said, due for example to the tendency for corporations to boost performance as of year-end by booking exports in December and to the Lunar New Year.

The services account deficit narrowed to $0.13 billion from $0.21 billion in the previous month as the transport and the business services accounts improved greatly, offsetting the widened travel account deficit.

The financial account shifted from December's net outflow of $3.50 billion to a net inflow of $1.22 billion. Direct investment saw a net outflow of $2.01 billion, up from $0.84 billion a month earlier as inward investment changed to a net withdrawal.

Portfolio investment shifted from a net outflow of $2.41 billion in December to a net inflow of $7.74 billion owing to a sharp inflow of foreign investors' investment in equity securities and a shift of their investment in debt securities to a net inflow, the bank said. Financial derivatives posted a net inflow of $0.43 billion.
Other investment saw a net outflow of $2.28 billion due mostly to an increase in domestic banks' loans, the bank said. Reserve assets increased by $2.66 billion, while the capital account was roughly in balance.